Okay, so you’ve had some cashflow issues and couldn’t pay your tax on time (It happens).
The ATO stung you with some interest, Ouch.
But we got a tax deduction for the interest. OK not so bad.
Well, that loophole is about to close tighter than a tax agents lunch break during tax season.
From 1 July 2025, you can no longer claim a tax deduction for ATO interest charges.
Why the Change?
Apparently it’s part of making the system “fairer” and “encouraging timely compliance” and other phrases from government officers who definitely pay their tax on time and probably eat boiled eggs for lunch.
It also came from a review back in 2019, which just now is getting its moment to shine
So what should you do?
It’s not revolutionary advice, but here it is: try to pay your tax on time.
If cash flow’s a bit tight, speak to your accountant early (they love that). Because after July 2025, paying late comes with zero perks. No deduction. No sympathy. No Netflix special about your struggle.
Final thoughts
If you are struggling to pay the ATO, chat to us early and often so we can help work through things.
As always, reach out to our team for any assistance, or find more details on the ATO website here.
Disclaimer: This article is here to give you general info only, not professional advice specific to your unique situation. While efforts are made to ensure accuracy, the content may change over time. We can’t take responsibility for any decisions based on the contents of this article, so be sure to chat with your accountant or advisor first!
Have a question or comment?
If you have any questions or comments relating to this article (or any other accounting matter) please get in touch with us at [email protected] and we’ll be happy to assist you.
